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always onestep of ahead stella rperformance

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2002 shareholdingdemocracydemand Annual Report

CORPORATION

Trinidad and Tobago Unit Trust Corporation

--------i[ Contents Jf--------Mission Statement 1

Performance Highligh ts 2

Corporate Information 4

Board of Directors 8 Chairman's Review 10

Executive Director's Report 16

20th Anniversary Timeline 26

Executive Management Team 30

Financial Statements

Management Responsibility for Financial Statements 31

Report of the Auditor General 32

Consolidated Balance Sheet Al

Consolidated Income & Expenditure Statement A2

Income & Expenditure Statement for

Management Operations

Consolidated Cash Flow Statement

First Unit Scheme Balance Sheet

First Unit Scheme Statement of Operations

First Unit Scheme Income Distribution Account

Second Unit Scheme Balance Sheet

Second Unit Scheme Statement of Operations

Second Unit Scheme Income Distribution Account

Universal Retirement Fund Balance Sheet

Universal Retirement Fund Statement of Operations

US Dollar Money Market Fund Balance Sheet

US Dollar Money Market Fund

Statement of Operations

US Dollar Money Market Fund Income

Distribution Account

Notes to the Financial Statements

Contributors to the Initial Capital

For the Trinidad & Tobago Unit Trust Corporation,

A3

A4

A5 A6

A7

A8

A9

AlO

All Al2

AJ3

Al4

Al5 Al6

33

2002 was the Year of the Quantum Leap. In the midst of celebrating its 20th anniversary, the organisation took steps towards reinforcing its presence in ninidad and Tobago, and the region. Prudent planning, strategic investments and solid management helped shape 2002 into a memorable year of growth and achievement - for the UTC and its unitholders.

'-J-

o

o encourage and

mobilise savings

in the community,

thereby fostering

a savings and

Investment .

conscIousness among

our people and

to channel those

resources towards

productive . . Investments, creatIng

in the process,

a wider shareholding

democracy.

Trinidad and To bago Unit Trust Corporation

[!>erformance I-lighlight~ 1998 1999 2000 2001 2002

INVESTMENT FUNDS SIZE ($M)

Growth & Income Fund 1,473.82 1,266.45 1,298.82 1,253.86 1,623.94

Money Market Fund 1,227.46 1,688.31 2,162.03 2,898.59 4,359.24

Universal Retirement Fund 6.44 9.01 14.23 20.99 52.26

US$ Money Market Fund 254.93 818.72 1,754.58

Total Investment Funds 2,707.72 2,963.77 3,730.0 I 4,992.16 7,790.02

OTHER FUNDS ($M)

Corporation Funds 103.01 122.27 132.50 157.89 217.33

LongTerm Investments 435.33 316.12 350.02

Pension Funds 91.47 110.83 154.49

TOTAL OTHER FUNDS ($M) 103.01 122.27 659.30 584.84 721.84

TOTAL RESOURCES

UNDER MANAGEMENT ($M) 2,810.73 3,086.10 4,389.23 5,577.00 8,51 1.86

MUTUAL FUND SALES ($M)

Growth & Income Fund 533.39 257.42 277.23 322.81 343.04

Money Market Fund 1,267.90 1,922.10 2,404.58 2,514.72 3,064.90

Universal Retirement Fund 5.91 2.60 3.85 4.82 22.22 US$ Money Market Fund 343.69 930.42 1,498.97

TOTAL SALES ($M) 1.807.20 2,182.12 3,029.35 3,772.77 4,929.13

FUNDS MOBILIZED $~ 7,031.91 9,214.03 12,243.38 16,016.15 20,945.28

UNITHOLDERS 232.267 266,956 315,270 355,809 391,700

TOTAL INCOME $M 254.30 289.40 382.83 507.29 662.68

DISTRIBUTION TO UNITHOLDERS ($M) 175.19 218.07 294.97 388.35 473.09

TOTAL INCOME ($M) DISTRIBUTION TO UNIT HOLDERS ($M)

382.83 289.40

1998 1999 2000

507.29

2001

662.68

2002

175.19

294.97 218.07

1998 1999 2000

388.35 473.09

2001 2002


--------I(!>erformance Highlight~t--------

NUMBER OF UNITHOLDERS

1998 1999 2000 2001 2002

TOTAL SALES ($M)

4,929.13

1998 1999 2000 2001 2002

FUNDS MOBILIZED ($M)

1998 1999 2000 2001

RESOURCES UNDER MANAGEMENT ($M)

20,945.28

2002

8,5 11 .86

1998 1999 2000 2001 2002

03

04

Trinidad and Tobago Unit Trust Co rporation

-----------i[ Corporate Infonnation]I-------

Board of Directors Chairman -----1 Judy Y. Chang

(until August 21, 2002)

Hubert Alleyne

(from August 30, 2002)

Executive Director -- Clarry Benn

Direcrors Michal Y. Andrews Terrence Bharath Hollis De Four Oscar B. Edghill Larry Howai Kamal Mankee Ian Pemberton John H. Smith Ray A. Sumairsingh Sookh Mungal Supersad

Corporate Secretary - Patricia Ilkhtchoui

Changes in Board Mr. Hubert Alleyne was appointed Chairman of the Board by the President of the Republic of Trinidad & Tobago for a period of five (5) years effective August 30, 2002, in accordance with Section 7(1)(a) and Section 10(1) of the Unit Trust Corporation of Trinidad & Tobago Act, Chapter 83:03. Mr. Alleyne succeeds Mrs. Judy Y. Chang who served as Chairman of the Board for a period of five (5) years from August 22, 1997 to Au gust 21, 2002.

Mr. Ian Pemberton was appointed by the National Insu rance Board effective July 01, 2002 in accordance with Section 7, Sub-Sections (l)(e) and (5) of the Unit Trust Corporation of Trinidad & Tobago Act, Chapter 83:03. He succeeds Mrs. Rhonda-Ann Parris-De Freitas who served on the Board for approximately two (2) months following her re-appointment for a period of four (4) yea rs effective April 22, 2002 to April 21, 2006. Mr. Pemberton, therefore, was appointed for tbe unexpired portion of Mrs. De Freitas ' term, L.e. approximately three (3) years and ten (10) months.

Mr. Terrence Bharath and Mrs. Michal Y. Andrews were re-appointed by the Board for a period of one (1) year with effect from

April 23, 2002, in accordance with Section 7 (2), (SA) and (6) of the Unit Trust Corporation of Trinidad & Tobago Act, Chapter 83:03.

Mr. Sookh Mungal Supersad was also reappointed by the Board for a period of one (1) year with effect from September 18, 2002, in accordance with Section 7 (2), (SA) and (6) of the Unit Trust Corporation of Trin idad & Tobago Act, Chapter 83:03.

Mr. John Smith resigned from the Board on December 31, 2002. He served on the Board as representative of the life insurance companies for an unbroken period of fifteen (15) years and five (5) months, i.e. from July 1987 to December 31, 2002.

As a consequence of Mr. Smith's resignation, Mr. Gerald H adeed was elected to the Board by the life insurance companies (initial capital contrib utor ) to serve for t he unexpired portion of Mr. Smith 's term in accordance with Sect ion 7(1)(f) and (5) of the U nit Trust Corporation of Trin idad & Tobago Act effective Jan uary 01,2003.


----------1[ Corporate Infonl1ation JI------

Bankers

Local

Overseas

Central Bank of Trinidad & Tobago

Central Bank Building Eric Williams Plaza Independence Square Port of Spain

RBTT Bank Limited #55 Independence Square Port of Spain

Scotiabank Trinidad & Tobago Limited

Corporate Offices #56-58 Richmond Street Port of Spain

Citibank (Trinidad & Tobago) Limited

#12 Queen's Park East Port of Spain

Citibank N.A. 11 Wall Street New York, N. Y. 10043 USA

Patricia Ilkhtchoui Corporate Secretary

Auditors

External The Auditor General of the Republic of Trinidad & Tobago

Eric Williams Finance Building Eric Williams Plaza Independence Square Port of Spain

In ternal PricewaterhouseCoopers Chartered Accountants #11-13 Victoria Avenue Port of Spain

Attorneys

Local

Over eas

Fitzwilliam, Stone, Furness-Smith & Morgan

#48-50 Sackville Street Port of Spain

Mair & Company #50 Richmond Street Port of Spain

Foley & Lardner Firstar Center 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202-5367 USA

05

06


------t[ Corporate Information]I-------

Corporate Offices

Head Office & Main Branch ·-

UTC Financial Centre #82 Independence Square Port of Spain

Branche SAN FERNANDO #23 High Street San Fernando

Tel: (868) 624-UNIT (8648) Fax: (868) 623-0092 E-Mail: [email protected] Internet Address: http://www.ttutc.com

WESTMOORINGS #1 Guardian Drive Westmoorings

POINT FORTIN # 13 Handel Road Point Fortin

Tel: (868) 657-UNIT (8648)10041 Fax: (868) 652-0620

Tel: (868) 632-9222/7720 Fax: (868) 632-7721

Tel: (868) 648-6836/2997 Tel/Fax: (868) 648-2997

CHAGUANAS #20 Yard Street Chaguanas

TOBAGO COUVA #32 Southern Main Road Couva

Tel: (868) 671-UNIT (8648)/6615 Fax: (868) 671-6581

Block A, Level 1 Scarborough Mall Tobago Tel: (868) 639-5096 Tel/Fax: (868) 639-5096

Tel: (868) 636-9871 Tel/Fax: (868) 636-4750

ARIMA #32 Sanchez Street Arima Tel: (868) 667-1153 Fax: (868) 667-2586

Senior Management Clarry Benn Executive Director

Renrick Nickie Executive Manager

Michael Alexander Executive Manager

Eutrice Carrington Manager, Investment Management Services

Marilyn Clarke-Andrews Manager, Accounting and Finance

Gayle Daniel-Worrell Manager, Marketing

Jennifer Fabien-Browne Manager, Head Office Operations

Patterson Gay Manager, Facilities

Portius James Manager, Branch and Agencies

Jonathan Jones Manager, Information Technology

Ruben Mc Sween Manager, UTC Trust Services

Larry Olton Corporate Manager, International Business Development

Amber Rondon Manager, Human Resources

Neville Sandy Manager, Compliance

David Thompson Manager, Merchant Banking

Roger Williams Manager, Card Services

" n e of the many

commendable

features of the

UTe's operations

is the relat ively

h igh level o f

income which

it h as been

distributing to

its unitholders."

A Second Decade of Success The T r inIdad and To bago U nit

Trust Corporation 1992-2001

10

J COlrOIA TI OH

Chairman's Review

H Hubert Alleyne

aving been re-appointed to the Board in August

2002 after an absence of eight years, I am

extremely delighted to present my first report

as Chairman of the Board of the Trinidad and

Tobago Unit Trust Corporation.

Trinidad & Tobago Unit Trust Corporation

---------l[ Chairman's Review Jr--------

I also take this opportunity to publicly express my own thanks and that of my fellow Directors to my immediate predecessor - Mrs. Judy Chang - who during the period of her stewardship presided with vision, integrity and a quiet confidence, qualities which have endeared her to our various publics. Not unlike Moses in the scriptures, Mrs. Chang would not be with us when we enter the promised land after the necessary legislation is passed and the UTC becomes a limited liability Company. However, I have no doubt that her thoughts go before us as we press forward, towards the mark of the high calling, which is the passage of the UTC Vesting Bill and ultimately the listing of the new company on the Trinidad and Tobago Stock Exchange. This promise has been made to the investing public every year for the last three years but the enabling legislation has not yet been enacted. The result has been the loss of wealth and opportunity, especially to the small unitholder. We hope that the present Administration will succeed in obtaining passage of the Bill in the next few months. If not, we are resolved, nonetheless to move

successful marriage, how to bring up successful children, and finally, how to build personal wealth successfully. Now, if these subjects were brought to our attention formally, we might come to the conclusion that conventional wisdom is wrong. The reason is that while your income might be . . increasing, so are your mortgage expenses, looming tertiary education costs for the children and also all of your household bills. Even with both spouses working, you cannot see how you could care for aging parents or withstand a long stint of unemployment or illness. Moreover, preparing for an easy retirement at sixty-five or even seventy-five seems to be unattainable . Everyone with self-earned wealth will tell you that money is not complicated. The confusing financial terms, buzz words and complex explanations from investment advisors and professionals are not necessary and perhaps just serve to muddy the waters and cause further confusion. Success with money, family, relationships, health and careers is the ability to reach your personal objectives in the shortest time, with the least effort and

ahead with full speed in achieving our initial mandate: • To mobilize the savings of

the community in order to channel them into desirable investments.

• To provide to persons of modest means the facility for owning shares.

"Success with money, family, relationships, health and careers is the ability to reach your personal objectives in the shortest time, with the least effort and with the fewest mistakes. "

It is with this purpose in mind that I now present a few thoughts for consideration on the topic of the Building of Personal Wealth.

THE BUILDING OF PERSONAL WEALTH Conventional thinking about building your Personal Wealth is very simple. It says: Maximize your earnings, minimize your expenses, meet your financial obligations and above all, ensure that you have some sort of nest egg to provide for your old age and to pass along to the children. But to turn your life's dreams into realities, there are three strategies our teachers never taught us in school. These are: How to have a

with the fewest mistakes. The goals you set for yourself and the strategies you choose become your blueprint or plan.

Some people say that you are wealthy when you can live off of the returns of your Investments. This can occur at 24, 27, 49 or 58.


--- --- ---i[ Chairman's Review JI-- --- - - -"You must know t h e basic difference between an asset and a liability and then buy product ive assets. If you want to be wealthy, t his is all you need to know."

The age factor is not important. What IS

vitally important IS

learning not to undertake uncontrolled spending. There are other definitions of being wealthy. For

instance, you are wealthy when you have reached the point where your decision to go to work is not determined by financial need. You are wealthy if you can make a career change without regard to salary. You are wealthy if you can take time off from work to investigate a project that is important to you for non-financial reasons. And you are wealthy when you volunteer your time to public charities without considering the financial ramifications to your income stream. Ultimately, however, the only definition of wealth that really matters is your own. Some people are quite content to earn enough so as to maintain their current standard of living. Others dream of sailing around the world, or having an island home. Whatever your personal goals, make sure the steps to those goals are small enough to climb.

Most people cannot tell why they keep struggling financially. It is because they do not understand the concept of cash flow. You must know the basic difference between an asset and a liability and then buy productive assets. If you want to be wealthy, this is all you need to know. It is Rule #1. IT IS THE ONLY RULE. This may sound absurdly simple, but most of us have little idea of how profound this rule really is. The records show that many people struggle financially because they do not know the real difference between an asset and a liability.

Wealthy people acquire assets. The poor and middle-class folk buy liabilities which

they think are assets. In short, the wealthy buy assets but the poor only have expenses. The middle-class buys liabilities that they think are assets.

A person can be highly educated, professionally successful but financially illiterate. These people often work harder than they need to because they learned how to work hard but not how to make money work for them. You will remember as children we were programmed into a system which preached: Go to school, study hard, get a good job and retire happily. The system omitted some important ingredients such as how to make the best use of earnings, how to save and invest wisely so that you could become independently wealthy. This is one of the tragedies of our present system of society. If our schools taught people about money, there would be more wealth for all of us, there would be lower prices on goods and services and our country would be more prosperous with increased savings and investment. But unfortunately, today, our schools' curricula focus only on teaching people to get jobs and work for money and not how to take advantage of the power of money.

You and I know many people who appear to be wealthy. They live in expensive houses, belong to the most exclusive Clubs, travel the world, dress in the latest fashions, have expensive new cars and boats and enjoy high paying jobs. The truth is that in many cases they live from paycheck to paycheck, albeit a big paycheck. They are "the noveau riche". My experience shows an inverse relationship between the amount of ostentatiOn and size of a productive investment portfolio. This is because the more money people spend on possessions, the less money they have left for investment. Yes, I will admit that there are exceptions but the sad fact is that most of the people


- --- -----l[ Chairman's Review JI--------who appear to be wealthy are not at all financially secure.

One lady confided in me recently, "I have always been told that I worked for peanuts. Well, maybe I did, but I saved as many of those peanuts as I could . Then when the time came, I made peanut butter out of them ." Her investment portfolio is now valued at $500,000. It earns income of about $60,000 per annum . Add her pension and other retirement income and subtract her personal expenses and she is genuinely wealthy with a healthy surplus. She lives comfortably on the income generated from her investments, which is quite remarkable for someone whose annual salary never exceeded $25,000.

I need to caution you about borrowing money. It is a more complex exercise than most people realize especially since the cost of borrowing can hamper greatly your ambitions for acquiring wealth. I have categorized the three basic reasons for borrowing money in terms of worst, better, best.

WOR ST To purchase perishables such as meals, gas, groceries and airline tickets. You will realize that these are consumables and produce no additional income.

BEITER

+--

on your home. As an example, if you borrowed $100,000 today over 30 years at 10% per annum for a property valued at $125,000, this would cost you in interest $215,926 by the year 2031 or over 215% what you had borrowed initially. As a comparison, if you borrowed $100,000 today over 15 years at 10% per annum, this would cost you in interest $93,430 or a saving of $122,496 or about 57%. However, the monthly payment could be approximately 18% higher. A little known fact among most borrowers is that most of your mortgage payments in the early life of a mortgage goes towards interest. Typically in the first year 95 cents of every dollar covers interest payments. Gradually, your mortgage payments cover less and less interest and more and more of your principal. Do not be fooled into thinking that after making 15 years of payments towards a 30 year mortgage you would have paid off half of your principal. Actually, it would take 23.5 years before you could pay off 50% of your principal.

Now there is a way to save colossal amounts towards building your personal wealth by applying this formula which I will now

share with you. Supposing that your present mortgage loan balance is $200,000, the rate of interest is 12% per annum and the term of the loan is 30 years. You are, therefore, payIng $2,057.23 To purchase depreciables

such as private motorcars, clothes, furniture and appliances. Here again, these items are rarely income producing assets.

"Think of your job at whatever

monthly towards your mortgage. Now, if you pay $25 per month more towards the principal, you could save $64,316 in interest and reduce the life of the mortgage by almost 4 years. Using the same mortgage loan example, if you paid $200 more per month towards principal you could save in interest over the life of the loan $247,884 and shorten the term of the mortgage by

BEST To purchase appreciable assets such as units from the Unit Trust Corporation, Real Estate or other investments.

Furthermore, be extremely careful in acquiring a mortgage loan

. . . organIsatIon In which you are

employed as not an extension of

yourself o r your life ... Your work is

what you do so you can h ave a life. "


---------l[ Chainnan's Review]I----------

"The evidence suggests that a

concerted drive should be made in

the society, particularly among

the young to help with the

debilitating scourge of financial

illiteracy. "

about 12 years. Yes, we are talking big money. In the last example the

. . savings are In fact more than the initial mortgage of $200,000. Before I conclude on this particular point, you could use the identical strategy towards any instalment loan for a car or

a piece of equipment and save huge sums of money.

To conclude, however, I wish to give you some personal thoughts for consideration:

Pay cash for your consumer purchases, as far as possible. Use loans and credit cards sparingly and only with great caution and avoid hire purchase arrangements as much as you possibly can. On your Credit Card Statement there is a box entitled "NEW PURCHASES THIS MONTH". The minimum you should pay if you ever want to eliminate credit card debt is what you owe for your new purchases for the month plus the minimum required payment. Pay off the credit purchases you make this month with a cheque next month when you receive the statement. Don't wait.

Think of your job at whatever organization in which you are employed as not an extension of yourself or your life. Perhaps you could consider yourself as somewhat of an entrepreneur supplying services for a fee which is now your salary. I recently heard the story of a lady who at age 37 was extremely successful as an advertising

executive. But when her 5 year old daughter was more upset when the babysitter took a vacation than when she had to

go abroad on business, she knew something was terribly wrong. After it was made clear to her that she could not possibly keep her job without putting in endless hours, she found another job with a company that did not demand 24 hours a day, seven days a week. She is making the same money, but now she is at home for dinner every night with her family. Your work is what you do so you can have a life.

Plan a life of lifelong satisfying work. Remember that when the concept of retirement income and pensions was first created, people died at 63. Today, however, you are likely to live into your eighties and in your older years you will be still active and productive. Ensure that the pension and retirement income in your organization will be adequate for you.

What about inheritance? The old cliche, Grandpa earned it, Dad used it and the kids spent it, is no longer true. Today, most parents have spent it long before the kids have a chance. Wealth today is rarely inherited. Most often it is earned and saved the old fashioned way, through hard work and careful spending patterns. There are, of course, exceptions, but they are just that -exceptions. You should therefore, try to leave this life as you came into it - penniless. Your assets are resources to be used for your own benefit and for the benefit of those you love and cherish. Consider giving it away to your children and grandchildren before you die. The old philosophy of personal finance encouraged you to live above your means in your early years, and then make up for that indiscretion by living beneath your means when you are older. Perhaps the new approach should be that you live fully up to but not beyond your means for your entire life. After all, you are not a corporation -you are a human being. Your money should not outlive you. As Andrew Carnegie is reported to have said "He who dies wealthy dies in disgrace" However, if you still wish to leave an estate, then for God's sake, leave a proper will.


---- -----l[ Chainnan's ReviewJt--------

There is an old saying that everybody wants to go to heaven but nobody wants to die in order to get there. Applying this idea to this presentation, everyone wants to earn some measure of financial independence but they find it difficult to take the steps to achieve that goal. No great civilization has ever been judged great because of wealth alone. There are other factors more important than Gold or GDP. Therefore, I believe more in the philosophy of GNH or the Gross National Happiness of our citizens and recommend that by training people to become financially independent from an early age, such an approach could go a long way towards achieving national peace of mind and a more prosperous and productive Trinidad and Tobago for future generations. The evidence suggests that a concerted drive should be made in the society, particularly among the young to help with the debilitating scourge of financial illiteracy. In this respect, we have already commenced discussions with the University of the West Indies - Institute of Business to develop some sort of accredited programme to assist citizens in our society. We look forward to reCeIVIng your full support 10 this endeavour.

Appreciati n

On behalf of the Board of Directors, I wish to convey our deep appreciation and sincere thanks to all our Unitholders, both at home and overseas, for their loyalty and continuing confidence in our stewardship of their funds. To the Management and Staff of this noble institution, I extend on behalf of the Board of Directors, heartfelt congratulations for their outstanding performance in 2002. Finally, I take this opportunity to thank my fellow Directors for the support and co-operation they have given me since I assumed the position of Chairman a few short months ago .

While 2002 was indeed the beginning of a veritable quantum leap I give the assurance that your Board and Management remain committed to redoubling their efforts to ensure that both the upward and forward momentum are maintained in the year ahead.

April 8, 2003

16

Executive Director's Report

ClarryBenn

Against the backdrop of a generally favorable

domestic macroeconomic environment, the

UTe Family celebrated yet another year of

stellar performance in 2002 despite the

uncertain political environment that persis ted.


-------l@,xecutiveDirector'sReport] I------

T e following are some of the Corporation's noteworthy achievements in 2002: • Unit sales of $4. 9bn were attained, an

increase of30.8% over 2001. • As at December 31, 2002, there were 391, 700

accounts on register, representing an increase in the unit holder base of 10.1% or 35,891 accounts over 2001.

• Consolidated assets jumped by 51.55% to $8.5bn. Of that amount, $7.8bn represents investment funds, up from $5bn the previous year.

• Total income rose by 30.6% to $662. 7m. • The Corporation's Merchant Bank out·

performed its own targets and added $22.9m to total income, approximately $18. 9m more than in 2001.

• Unit holders enjoyed $84.7m more in distributions, which totalled $473. 1m for the year.

• Net income improved tremendously from $25.4m to $64.4m, representing a 153.8% lncrease.

• Retained income grew from $157. 9m to $217.3m.

This outstanding all-round performance has positioned the UTC as a financial model within the region and is a manifestation of our motto, "Always One Step Ahead".

FINANCIAL PERFORMANCE

Income and Expenditure I am pleased to report that the 2002 total income benchmark of $600m was exceeded by $62.7m. Of the 30.6% or $155.4m increase in total income, the bulk is attributable to investment income from the US Dollar Money Market Fund (42%) and the Second Unit Scheme (37%). Merchant Banking activity also made a significant contribution to income.

Total expenses increased by $103.8m or 23% to $557.9m with distribution payments accounting for 82% of that increase. In 2001, distribution payments to unit holders represented 82% of total expenses, but in 2002, this figure improved to 84.8% showing that the Corporation is committed to

transferring wealth increases to its unit holders.

After finance charges relating to the cost of the UTC Financial Centre are taken into account, the above movement in total income and expenses results in a 125.6% improvement in net income from $41.4m in 2001 to $93.3m in 2002. Further deductions in terms of transfer to reserves and undistributed income lead to a net income from management operations of $64.4m, a boost of 153.9% over 2001. The resulting effect after a final $5m transfer to the Guarantee Reserve Fund is a stronger retained income position of $217.3m, up 37.6% from $157.9m a year earlier.

Operational Performance The fixed income market did not present attractive investment opportunities in 2002 due to high liquidity and limited new bond offerings. However, the Corporation still managed to increase investment funds to just under the $8bn mark. By December 31, 2002 funds under management grew by an impressive 56% or $2.80bn from $4.99bn to $7.79bn. At this growth rate, we should expect the combined fund size to cross the $10bn benchmark by the end of 2003.

ales and Repurchases In 2002 the combined gross sales for all of the funds stood at $4.9bn, representing an increase of 30.8% or $1.16bn. On the other hand, repurchases rose marginally by 4.16% to $2.5bn resulting in a net position of $2.4bn. Overall, the net position improved appreciably by 84 .6% over 2001.

The substantial growth in sales coupled with the marginal increase in repurchases provided the impetus for growth 111

investment funds which also underscored the public's continued confidence in and loyalty to the UTe.

Closer examination reveals that once again, the United States Dollar Money Market Fund was the major contributor to the $1.16bn advance in sales, accounting for 49.3% or $573.4m of the increase. The Second Unit Scheme followed closely with 47.3%. In gross terms however, the Second U nit Scheme generated the majority of sales

18


----------i~xecutive Director's Report] I-------

with a contribution of 62.1%, with sales rising from $2.5bn to $3.1bn by the end of 2002. Both the United States Dollar Money Market Fund and the Universal Retirement Fund experienced exceptional growth in sales during the year, with their respective sales rising by 61.4% to $1.5bn, and 359% to $22.1m. The First Unit Scheme reported less pronounced sales improvement, with a $21.6m or 6.7% increase to $344.4m.

Consistent with past trends, the two money market funds contributed 92.6% of the sales volume.

INVESTMENT PERFORMANCE

The First Unit Scheme During 2002, the combination of severe downward pressure on U.S. stock prices and the lack-lustre performance of the domestic fixed income market failed to put a damper on the key performance variables of the Scheme due to a strong showing in the domestic equity market.

Among these key performance variables is investment income, which rose by 8.6% to $136 .2m mainly because of increased realized capital gains. After accounting for management charges, the net investment income appreciated by 6.1% to $106.6m. On the balance sheet side, fund size moved from $1.25bn to $1.62bn, an increase of 29.5% or $370m.

The Scheme opened the year 2002 with offer and bid prices of $11.25 and $10.70 per unit respectively. After its July 01 ex-distribution status was established, unit prices settled at $11.60 offer and $11.05 bid. However, on December 31, 2002, the unit prices stood at $13.35 offer and $12.70 bid, creating a net return to unitholders of 22.22% . If reinvestment is taken into account, then the net return to unitholders was actually 26.12%. This compares very favourably with the previous year's return of -0.3% .

Positive returns during the year attracted 3,615 new investors to the Scheme, bringing the investor base to 138,247 accounts by the end of 2002.

PORTFOLIO STRUCTURES

GROWfH & INCOME FUND

3.79% 10.66% Manufacturing Cash & Short Term Investments

1.76% B'dos Equity

2.50% US$ Equity

1 .36% Property

10.39% 6.71 % Non Banki ng Financial Institutions Conglomerates

MONEY MARKET FUND

16.12%

UNIVERSAL RETIREMENT FUND

; .. ' .

; . . ' \

9.48% Cash & Short Term Investments

13% Conglomerates

.... "'\ .. . . . 5.4 2%

Property

0.71 % Trading

37.59% Debt Securities


----------i~xecutive Director's Repor!JI------

PORTFOLIO STRUCTURES

US$ MONEY MARKET FUND

29.94% Government

Securites

1.38% Corporate Securities

INVESTMENT FUNDS

0.67% Universal Retirement Fund

MANAGEMENT OPERATIONS (2002 INCOME CATEGORIES)

3.08% Rental Income 17.51%

7.34% Initial Charge

The econd Unit cherne The environment in which the Second Unit Scheme operated during 2002 was nothing short of challenging. Again, this was as a result of high liquidity in the system despite the Central Bank's attempt at open market operations. Its sale of U.S. dollars to the banks and the low demand for loan credit neutralized the effects of its open market operations and repo rate policy. Owing to such liquidity conditions, interest rates across the board were depressed during the year. There were also few capital market issues, as many investors adopted a wait-andsee approach to their capital investments, pending the resolution of the political stalemate. The trend was also towards refinancing of existing debt at lower rates, rather than the issuance of new debt.

Even under such unfavorable conditions, the Second Unit Scheme performed creditably in 2002. The fund size of the Scheme increased by $1.46bn or 50.4% from $2.90bn to $4.36bn. On the income side, $345.7m in interest income was earned, which represents an increase of 21.6% or $61.4m. Similarly, net investment income expanded by $44.8m or 18 .3% to $289.6m of which 95.5% was distributed to unitholders. This represents a 4% decline over the amount distributed in 2001 due to an additional allocation to reserves of $11.9m.

The average net yield to unitholders was 7.49%, which is 237 basis points below that of the previous year. However, it was still 225 basis points above the average 90-day treasury bill yield that prevailed at the end of 2002.

Nevertheless, investors were not deterred by the lower yield as the unit holder base of the Scheme grew by 12.3% to 228,123 accounts.

The Universal Retirement Fund Like the First and Second Unit Schemes this Fund was also forced to operate under dismal local and foreign interest rate environments and a volatile foreign equity market . Consequently, efforts were concentrated in the very vibrant domestic equities market.


- - ------I[Executive Director's Rep0rDt------

Accordingly, the Universal Retirement Fund posted a net return to unitholders of 22.72%, up from 12.69% in 2001, as the net asset value rose to $17.23 by the end of 2002.

Over the year, the Fund grew by a notable 149% from $20.9m to $52.3m, while gross investment income climbed to $2.3m, up 12.9% from $2.1m. The increase in income was mainly attributable to a 11.7% increase in interest income from $1.55m to $1.73m and in totality, this item accounted for the bulk or 74.2% of total income. On the other hand, dividends rose by 16.4% to $602,000, representing 25.8% of total income. However, net income for capitalization decreased by 16.6% from $1.67m to $1.40m.

The Fund continues to grow steadily as the number of registered accounts stood at 2,993 representing a 13.6% increase over 2001.

The Uniled Sates Dollar Money Market Fund In the last annual report I stated that the United States Dollar Money Market Fund completed its first full year of operation and that it was the best yielding U.S. dollar fund in the local mutual fund industry. Only one aspect has changed since then: it has now been two years since its introduction but it is still the most attractive alternative in the U.S. dollar money market mutual fund subsector.

The Fund produced another year of superb growth, moving from $818.7m (US$133.5m) at the end of 2001 to $1.75bn (US$289.1m) by the end of 2002, an increase of 114.3%. Likewise, total investment income almost doubled from $65.5m (US$10.7m) to $130.3m (US$21.5m). The same can also be said of net investment income, which increased by 96% to $104.7m (US$17.2m). This ultimately led to a 92% or $96.3m (US$15.9m) payout to unit holders, up from 84%.

It is therefore not surpnsmg that the number of accounts increased by 44.6% from 15,446 to 22,337.

MANAGEMENT OPERATIONS (NET INCOME & EXPENSES AS

PERCENTAGE OFTOTAL INCOME)

_ Net income _ Expenses

74%

BOND ISSUES

CUMULATIVE DISTRIBUTION ($M)

2,067.72

1996 1999 2000 2001 2002


------l~xecutjve Director's Report] I--- - - -

The Chacoma lnc )me and Growth Fund Tension in the world political environment, slow improvement in corporate profitability, and negative news on the integrity of corporate financials led to an erosion of investor confidence and exuded constant pressure on u.s. equity markets in 2002. Therefore, the turnaround that was expected in the u.s. economy did not come to pass.

"This o utstanding allround performance has

positioned the UTe as a financial model within the

region and as a man· festation of our motto:

I always one step ahead'."

The Chaconia Income and Growth Fund was not spared as it experienced a loss of 17.15% for the year. Yet, its highly diversified portfolio enabled It to weather the storm less severely than the

Dow Jones, NASDAQ and S&P 500 indices, which all suffered declines of 17.19%, 32.52%, and 23.8% respectively. Moreover, it was named the best performing fund in its category in the United States for the last quarter of 2002 by Barron's - the Dow Jones Business and Financial Weekly.

Given the economic outlook, the Fund's performance is likely to remain volatile in the near term. However, the Corporation remains steadfast in its quest to capitalize on opportunities that would limit the losses and improve the yield.

OTHER BU INES EGMEN TS

The Merchant Banking Department Prior to 2002, the Merchant Banking Department has underwritten a number of issues approximating $1.37bn since its inception in 2000. For 2002 it obtained mandates for three (3) bond issues totaling $417.8m, or 11.6% of the $3.6bn worth of original issues for the year.

Further, the Department's total investment income rose by 9% to $S2.1m, while there was a marked reduction in expenses from $43.7m to $29.2m. The combined effect was an impressive increase in its contribution to

net income from $4.08m in 2001 to $22.9m in 2002.

The Bureau de Change generated $3.28m in revenues, representing an increase of $l.4m or 74.9% over 2001.

The [mernational Business Development Unit Although the official launch of the Belize Unit Trust Corporation did not come off until early 2003, the groundwork took place 10 2002 and it was thus a major accomplishment for the International Business Development Unit for that year, in terms of its pursuit of expanding the regional presence of the Corporation.

The Unit initiated action across the Atlantic Ocean when in May 2002 it facilitated the signing of a memorandum of understanding with Nigerian investors with the intention of duplicating the UTC model in Nigeria.

During the year, Chaconia Financial Services was registered as a broker-dealer company with the Securities and Exchange Commission and the National Association of Securities Dealers in the United States.

Branch Networking In its attempt to enhance the quality of physical facilities provided to the investing public, the Corporation, on August 19, celebrated the turning of the sod by the Honorable Patrick Manning, Prime Minister of Trinidad and Tobago to commence construction of a new branch in

24


--------i~xecutive Director's Repor!JI------

The financials in this report speak for themselves and it is only a matter of time before the Corporation assumes the position of the third largest financial institution in Trinidad and Tobago, as measured by assets.

APPRECIATION

I wish to express my sincere gratitude to all those who contributed to another successful year in the history of the Corporation.

I also take this opportunity to welcome the new Chairman of the Board, Mr. Hubert Alleyne and to wish his predecessor, Mrs. Judy Chang, all the best in her future endeavors. Very deserving appreciation also goes out to the other members of the Board of Directors for their direction, guidance and focus .

As Executive Director, I wish to express my deepest appreciation to the executive management, middle management, and general staff for their support and hard work.

Finally, thanks to the many unitholders who have remained loyal to us. We look forward to serving you as we continue our journey of redefining the financial {2; in L' opeme

c ·

Clarry Benn

April 10,2003

Trinidad & Tobago

J p

, ~ It . II

h

. 1

It

A Second Decade of Success The Trinidad and Tobago Unit Trust

Corporation 1992-2001

26


Our 20thAnniversary

T( lilNll<h·c! I t> E. Il lh llCt?, ,.." HI wi

Rt "mIl' rm'f('"iItl/T7/ 77" 1 .ml.- an'

drsiwml /t) ~11I VII OlR< I'r~ i ( .lIId ,III"/w/4,"

Y<l''''l m i/1II1J1/){jUW/Il ' I i(lll"l lISt

Ibroll /"'111 11,. ( .Jrtl l~·", I'( i", . 1'1",'"

CIP.'H II. ' Dir ' /IT ( f I ll) Hellll ,.

,I,

B.,.,k " "fim ll{.JI/ ",ul ToIA, ' ,,1 '.II'I W'i'I" "

MAY

In 2002, Customer Appreciation Days

'were held in A rima, Westmoorings and

Couva, Here Couva cuslOmers enjoy

UTC',-hospitality_

MAY The 'WolI/en v/Trinidad (/nd Tobago

tllrned thl' Qu en '5 ['ark Savannah hlue

on the ocmsion o/the inauKural UTC

R ihbons of Hope 5k nlll/ walk, 7he

(/nn llal c'vent seeks to raise/unds tv "ssist

yvung pel'sons in T& T living fv it/' HIV

JUN E

2002 71A1S definitely (l year of 'fints',

UTC {aullched iujirsc-evcr debit card,

the FUNDCARD. The c,,,eI gives

Imid)oiders (lccess to their Money

Market Flmd accollllt through

AutoJllatic Teller Macbines (ATMs).

7hae arc W)O sllch ArMs at the

UTC Fillancial Centre, and one cflch

at the Westmoon'ngs, ,~~'" [emanti"

and Arim<1 lmmcbes.


Year in Pictures

UNE

AUGUST TIle then UM/rman Judy Chang.

I ,isiS ['rum Mirlislcr Patrick

"s Schools' In·vestment Came

"Wn'atc'd its tenth anniversllry in 2001.

Senior Comprehensive's

AUGU ST nJr N'llion celebrated its 40th

ImivcYS(lry in August. The

Corpor(ltion hosted a gala tribute

with fireworks that lit "p the n ighl.

Entertainers thrilled the audience

with lively perlo/mances.

AUGUST SEA 7 year scholarship recipien 15 •

Rynessa CUlling, Stephen Care;'"

and Makeda Rosales

27


SEPTEMBER For the last quarter of2002, visitors to

UTC's Financial Centre were awed by the

skill ,md im"l(mation of Jackie Hinkson.

His art and Im /ptum "domed th!! C<'I'Itrl!

gracing it with creati·vity and wonder.

The exhibition was one facet of the UTC's

A nniversary programme.

UTC's reach extends to sport. The UTC Sport Scholarship was awarded to

Ayeisha Collyrnore ~eft) and Ravi Rampaul (second from right). Ayeisha

too/e home fLVe gold medals at the CARIETA Swimming Championship,

while Ravi made it to the cricket record books with his perfonnance at tbl!

Regional Under·19 Cricket Tournament. On hand for the prt!sentittion 'U~

Minister of Sport Roger Bo),,,"s arId UTe Excmtive Director Clarry lkmr.

DECEMBER UTe do IIt1U'nled its set:(md decade of .lrhie'IJemetlt

in a /xllik titlt'd: 'A rctmd Dec"de I'I/SUCC(!$S'.

Pboto shows Cbaimlan Hilbert Alleyne presenting

a cerpy to Minister in the Ministry of Finance

Conrad Enill.

DECE MBER

Otttgoi"g Chairman JI/dy Chzng _'il> ,p«i.lfly IJOnolired

dl/ring tbe UTC's gdl .. l.mly. m';u Au-./l'Ils celebration.

lIere \wrl.:rt j"g Ojfurr CMr;·I·Ann PIJillips·Gonzales

p~m "'.r wills ~ co",mnlwY,lIive plaque.

Trinidad & Tobago U it Trust Corporation

Q) -C ~

L+-

0 L.....

0 CD

>- 29.

(l)

S-~

30

COI'OIATION

Executive Managetnent Teatn

Clarry Benn Renrick Nickie Michael Alexander Executive Director Execllt;ve Manager Executive Manager

Trinidad & Tobago Unit Tlust Corporatioll

_ _ _ _ -IIManagement ResponsibilitYl L For Financial Statements :Jt------

Management is responsible for the preparation of the Corporation's financial statements and related information appearing in this annual report. Management believes that the financial statements fairly reflect the position and results of operations in conformity with generally accepted accounting principles. Management has included in the Corporation's financial statements, amounts that are based on estimates and judgments, which it believes are reasonable under the circumstances.

The Corporation maintains a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, at appropriate cost, that transactions are executed in accordance with the Corporation's authorisation and are properly recorded and in the financial statements, and that assets are adequately safeguarded.

The independent accountants audit the Corporation's financial statements in accordance with generally accepted auditing standards and provide an objective, independent review of the Corporation's internal controls and the fairness of its reported financial position and operating results.

The Board of Directors of the Corporation has an Audit Committee comprised of nonmanagement Directors. The Committee meets with financial management and the auditors to review internal accounting controls and accounting, auditing and financial matters.

Signed by:

{LrL C o

Executive Director Clarry Benn

· {>L 0 . A---7~ecutive Manage<

Michael Alexander


TO: THE BOARD OF DIRECTORS TRINIDAD AND TOBAGO UNIT TRUST CORPORATION

REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF TRINIDAD AND TOBAGO ON THE FINANCIAL STATEMENTS OF THE TRINIDAD AND TOBAGO UNIT TRUST CORPORATION For the year ended 2002 December 31

The accompanying Financial Statements of the Trinidad and Tobago Unit Trust Corporation for the year ended 2002 December 31 have been audited. The Statements as set out on pages one to thirty-one (31) comprise:

(a) IN RESPECT OF THE UNIT TRUST CORPORATION

• A Consolidated Balance Sheet as at 2002 December 31 • A Consolidated Income and Expenditure Statement for the year ended 2002 December 31 • An Income and Expenditure Statement for Management Operations for the year ended

2002 December 31; and • A Consolidated Cash Flow Statement for the year ended 2002 December 31.

(b) IN RESPECT OF THE FIRST UNIT SCHEME, SECOND UNIT SCHEME AND THE US DOLLAR MONEY MARKET FUND, FOR EACH

• A Balance Sheet as at 2002 December 31 • A Statement of Operations for the year ended 2002 December 31; and • An Income Distribution Statement for the year ended 2002 December 31.

(c) IN RESPECT OF THE UNIVERSAL RETIREMENT FUND

• A Balance Sheet as at 2002 December 31; and • A Statement of Operations for the year ended 2002 December 31.

(d) Notes to the Financial Statements numbered one to twenty-nine (29).

2. These Financial Statements are the responsibility of the management of the Trinidad and Tobago Unit Trust Corporation. The Auditor General's responsibility is to audit these Financial Statements in accordance with section 30 (1) of the Unit Trust Corporation of Trinidad and Tobago Act, Chapter 83:03 and to report thereon in accordance with section 30 (4) of the said Act .

3. The examination was conducted in accordance with generally accepted Auditing Standards. These Standards require that the audit be planned and performed in order to obtain reasonable assurance about whether the Financial Statements are free of material misstatement.

4. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of information in the Financial Statements. The Auditor General is of the view that the audit which was conducted provides a reasonable basis for the comment made at paragraph 5 of this Report.

OPINION

5. The Financial Statements and Notes to the Financial Statements as outlined at paragraph 1 above are in agreement with the books of the Trinidad and Tobago Unit Trust Corporation and present fairly, in material respects, the state of affairs of the Corporation as at 2002 December 31 and the results of its operations and its cash flows for the year ended 2002 December 31 in accordance with generally accepted accounting principles.

2003 April 29

JOCELYN THOMPSON

AUDITOR GENERAL

TrinIdad & Tobago Unit Trust Corporation

CONSOLIDATED INCOME AND EXPENDITURE STATEMENT For the year ended December 312002

Notes 2002 2001 INCOME $'000 $ '000

Investment Income -First Unit Scheme 136,181 125,442 Second Unit Scheme 341,043 284,223 Universal Retirement Fund 2,330 2,064 US$ Money Market Fund 130,317 65,498

l\Jet Investment Income -Management Operations 15 26,497 7,516

Initial Charge 11,291 10,824 Other Income 5,915 4,31 I Rental Income 4,747 3,31 I Undistributed Income at start of year 4,358 4,104

Total Income 662,679 507,293

EXPENSES

Distribution 16 473,096 388,348 Commission 8,651 6,764 Administrative 17 68,166 53,998 Depreciation 6,018 4,965 Impairment Charges 18 1,994

Total Expenses 557,925 454,075

Net Income before Finance Charges 104,754 53,218 Finance Charges 9 (11,457) (I 1,855)

Net Income after Finance Charges 93,297 41,363

Transfer to Reserves (10,423) (I 1,622) Undistributed Income at end of year (18,440) (4,358)

Net Income for the year - Management Operations 64,434 25,383

Retained Income at start of year 157,898 132,515

222,332 157,898

Transfer to Reserve 12a (5,000) Retained Income at end of year 217,332 157,898

The following notes form an integral part of these Financial Statements

INCOME AND EXPENDITURE STATEMENT FOR MANAGEMENT OPERATIONS

For [he year ended December 312002

Notes

INCOME

Management Charge 19 Initial Charge Investment Income Rental Income Other

Total Income

EXPENSES

Commission Administrative 17 Depreciation Impairment Charges 18 Total Expenses

Net Income before Finance Charges Finance Charges 9

Net Income for the year

Retained Income at start of year

Transfer to Reserves 12a


2002 $'000

105,00 I 11,291 26,929

4,747 5,915

153,883

1,814 68,166

6,018 1,994

77,992

75,891 ( 11,457)

64,434

157.898 222,332

(5,000) 217,332

2001 $ '000

72.324 10,824 8,415 3.31 I 4.311

99,185

2,984 53,998 4,965

-

61,947

37,238 (I 1,855)

25.383

132,515 157,898

-157,898

A3

Trinidad & Tobago Ullit Trllst Corporation

CONSOLIDATED CASH FLOW STATEMENT For the year ended December 31 2002

2002 2001 $'000 $ '000

OPERATING ACTIVITIES NET INCOME

64,434 25,383

Adjustment to reconcile net income to net cosh from operating activity:

Depreciation Expense 6,018 4,965 Loss on Fixed Asset Disposals I Decrease/(lncrease) in Receivables 24,933 (22,555) Increase in Prepayments and Other Assets (6,061 ) (1,939) (Decrease)/Increase in Accounts Payable (1,532) 14,729 Increase in Other Liabilities 9,957 3,893 Income Reinvested in Mutual Funds (88) (48) Unrealised Foreign Currency (Loss)/Gain (54) 86 Capitalised Interest on Investments (3,226) (21,942) Decrease in Short Term Certificates of Interest (50,922) (214,672) (Decrease)/Increase in LongTerm Financial Instruments (18,648) 98,758

Net Cash Infiow from Operating Activities 24,811 (I 13,341)

INVESTING ACTIVITIES

Purchase of Fixed Assets (9,326) (3,624) Decrease in Investments 47,958 141.341 Proceeds from Disposal of Fixed Assets 118 90

Net Cash Infiow/(Outfiow) from Investing Activities 38,750 137,807

FINANCING ACTIVITIES

Finance Lease Repayments (2,763) (2,085) Movement in Reserves 2,093 7,030

Net Cash Infiow from Financing Activities (670) 4,945

NET CASH INFLOW FORTHEYEAR 62,891 29,411

Cash & Cash Equivalents: Beginning of Year 73,459 44,048

End of Year 136,350 73,459

A4 Thejollowing notesjorm an ill/egraL part ojthese FinanciaL Statements

ASSETS

Investments Cash and Short Term Investments Income Receivable

Total Assets

LIABILITIES

Distribution Payable Amount Due Corporation Other Payables

RESERVES

Undistributed Income

Total liabilities and Reserves

NET ASSETS

CAPITAL ACCOUNT

Trin iddd & Tubago Unit Trust Ccrporation

FIRST UNIT SCHEME BALANCE SHEET

As at December 31 2002

Notes

20

UNREALISED CAPITAL APPRECIATION 2 1

The following notes form an integral pari of these Financial Statements

2002 $'000

1,623,939 43,389 34,732

1,702,060

52,642 16,944

138

69,724

8,397

78,121

1,623,939

891,750

732,189

1,623,939

2001 $ '000

1,253,856 34,097 43,188

1,331,141

61,481 12,598

76

74,155

3, 130

77,285

1,253,856

785,830

468,026

1,253,856

AS

A6

Tri nidad & Tobago IJnit Trust Corporation

FIRST UNIT SCHEME STATEMENT OF OPERATIONS

For the year ended December 31 2002

Notes INVESTMENT INCOME

Dividends

Interest

Realised Capital Gains

Total Investment Income

EXPENSES

l"1anagement Charge 19

Total Expenses

NET INVESTMENT INCOME

The following nOles form an integral parI of these Financial Statements

2002 $'000

34,567

43,087

58,527

136,181

29,625

29,625

106,556

2001 $ '000

36,910

45,448

43,084

125,442

24,984

24,984

100,458

Tri llidad & Jooayu Uilil Trllst (nrpolatloll

FIRST UNIT SCHEME INCOME DISTRIBUTION ACCOUNT


Notes


Distribution Paid to Initial Contributors 80c per unrt: (200 I - 85c per unit) 16

Distribution Paid to Unitholders 80c per unit (200 I - 85c per unrt:) 16

Undistributed Income brought forward

Allocation to Guarantee Reserve Fund 12a

Undistributed Income at December 31

The following IIOtes form an integral parI of these FinaflCial StalemelllS

2002 $'000

106,556

770

99,519

6,267

3,130

9,397

1,000

8,397

2001 $ '000

100,458

818

99,120

520

2,810

3.330

200

3,130

Trillidilcl (I,. Tobago Unit Trust Corporation

SECOND UN IT SCHEME BALANCE SHE E T


Notes 2002 2001 $'000 $ '000

ASSETS

Investments 22 4,359,239 2,898,592 Cash & Receivables 40,863 42,166

Total Assets 4,400,102 2,940,758

LIABILITIES

Accruals for Distribution 16 18,524 12,646 Amount Due Corporation 3,728 25,479 Other Liabilities 8,710 2,191

30,962 40,316

Reserves 9,901 1,850

Total Liabilities and Reserves 40,863 42,1 66

NETASSETS 4,359,239 2,898,592

CAPITAL ACCOUNT 4,178, 112 2,898,592

UNREALIZED CAPITAL APPRECIATION 21 181,127

4,359,239 2,898,592

The fo llowing notes fonn an integral part of these Financial Statements

Trinidad & Tobago Urllt rrust CurpuratlOn

SECOND U ,N ITS C HEM E STATEMENT OF OPERATIONS

For the year ended December 312002

Note

INVESTMENT INCOME

2002 $'000

Interest Income 341,043

Investment Income

EXPENSES

Management Charge Interest Commission

Total Expenses


The f ollowing notes fonn an integral part of these Financial Statements

19

341,043

49,659 433

5,985

56,077

284,966

2001 $ '000

284,222

284,222

35,573 899

2,945

39,417

244,805

A9

AlO

Trinidad & Tobago Unit Trllst Corporat ion

SECOND U NIT S C HEME INCOME DISTRIBUTION ACCOUNT


Notes


DISTRIBUTION PAYMENT:

Distribution Paid

Accruals for Distribution 16

Total Distribution

Transfer to Reserves 12c


2002 $'000

284,966

257,992

18,523

276,5 I 5

8,45 I

284,966

2001 $ '000

244,805

230,999

12,646

243,645

1,160

244,805

Tn nidad & TobdgO Unit Truot lOlpordtion

UNIVERSAL RETIREMENT FUND BALANCE SHE E T


Notes 2002 2001 $'000 $ '000

ASSETS

Long Term Investments 47,304 15,356 Cash & Short Term Investments 1,942 3,543 Interest Receivable 3,548 2,306

Total Assets 52,794 21.205

LIABILITIES

Amount Due Corporation 532 214

NET ASSETS OFTHE FUND 23 52,262 20,991

CAPITAL ACCOUNT 43,180 20,088

UNREALISED CAPITAL APPRECIATION 21 9,082 903

______________________ ===5::::=:2=:,2:::6=2 20,991

The following notes form an integral pan of these Financial Statements

Trinidad & Tobago Uilit Trust Corporation

UNIVERSAL RETIREMENT FUND STATEMENT OF OPERATIONS


INVESTMENT INCOME

Dividends Interest


EXPENSES

Management Charge

Total Expenses

NET INCOME FOR CAPITALIZATION

The foL/owing notes form an integraL part of these FinanciaL Statements

Note

19

2002 $'000

602 1,728

2,330

934

934

1,396

2001 $ '000

517 1,547

2,064

391

391

1,673

Trinidad & Tobaljo lJrl1t Tru'of (oriJOiat ion

US DOLLAR MONEY MARKET FUND BALANCE SHE E T

As at December 31,2002

Notes 2002 2001 TT$ '000 TI$'OOO

ASSETS

Investments 24 1,754,583 818,717

Other Current Assets 46,711 37,041

Total Assets 1,801,294 855,758

LIABILITIES

Amount Due Corporation 14,606 19,343 Distribution Payable 23,459 16,471

38,065 35,814 RESERVES

Undistributed Income 8,646 1,227

Total Liabilites and Reserves 46,711 37,041

NET ASSETS 1,754,583 818,717

CAPITAL ACCOUNT 1,754,600 818,717

UNREALIZED CAPITAL DEPRECIATION 21 (17)

1,754,583 818,717


14

Trinidad & Tobaqn Unit Trust Corporation

US DOLLAR MONEY MARKET FUND STATEMENT OF OPERATIONS

INVESTMENT INCOME

Interest Income


EXPENSES

Management Charge Commissions

Total Expenses



Note

19

The following notes form atl integral part of these Financial Statements

2002 TT$ '000

130,317

130,317

24,783 853

25,636

104,681

2001 TI$ '000

65,498

65,498

11.376 834

12,210

53,288

Trinidad I<.. Tobago Unit Trust Corporation

US DOLLAR MONEY MARKET FUND INCOME DISTRIBUT I ON ACCOUNT


Note 2002 $'000

NET INVESTMENT INCOME 104,681

Distribution Expense 96,291

8,390

Undistributed Income at start of year 1,227 9,617

Transfer to Reserve 12b 971

Undistributed Income as at December 3 I 8,646


2001 $'000

53,288

44}66

8,522

1,294 9,816

8,589

1,227

A15

A16


NOTES TO THE FINANCIAL STATEMENTS For the year ended December 312002

INCORPORATION AND PRINCIPAL ACTIVITIES

The Trinidad and Tobago Unit Trust Corporation was established by the Unit Trust Corporation of Trinidad and Tobago Act ("the Act") Chapter 83:03 of the Laws of the Republic ofTrinidad and Tobago, generally to provide facilities for participation by members of the public in investing in shares and securities approved by the Board. The Finance Act of 1997 permitted expansion of the Corporation's scope of activities to include other financial services including merchant banking and trustee services. The Corporation's principal office is at the UTC Financial Centre, #82 Independence Square, Port of Spain.

2 SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these financial statements are stated below:

a) Basis of Preparation

These financial statements are expressed in Trinidad and Tobago Dollars and have been prepared under the historical cost convention except as modified in respect of security valuation (see (c ) below). The accounting policies in all material respects conform with International Accounting Standards. All material income and expenditure items are accounted for on an accrual basis.

b) Investments

Investment securities intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in exchange rates are classified as available-for-sale. Investments available-for-sale are carried at fair value.

Investments with fixed maturity that management has the intent and ability to hold to maturity are classified as held-to-maturity. Held-to-maturity investments are carried at amortized cost, less any adjustment necessary for impairment.

All purchases and sales of investment securities are recognized at the settlement date. Gains and losses from changes in fair value on investments classified as available-for-sale are recognized in equity When the financial assets are disposed of or are impaired, the related fair value adjustments are included in the income statement.

c) Security Valuation

The fair value of publicly traded securities is determined by reference to the prevailing market prices on the last trading day before the Balance Sheet date, on the offer basis.

The carrying amounts of financial assets and liabilities with a maturity of less than one year are assumed to approximate their nominal amounts.

Trin idad & Tobago Uilit Trllst lOlpOIJt101l

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For (he year ended December 312002

2 SIGNIFICANT ACCOUNTING POLICIES (Co"tinJfed)

d) Fixed Assets

The Corporation utilizes the straight line method of depreciation for all its depreciable assets with the exception of motor vehicles which are depreciated using the reducing balance basis. The straight-line useful lives are as follows:

Building Office Improvements Computer Equipment Office Equipment Furniture & Fixtures

Reducing balance basis: MotorVehicies

e) Foreign Currencies

50 years 5-15 years 3-10 years 4-15 years 7-15 years

25%

Monetary assets and liabilities denominated in foreign currencies are expressed in Trinidad and Tobago Dollars at the rates of exchange prevailing on December 3 I 2002.

Resulting translation differences and profits and losses from other transactions are recognized within the Income Statements except where the differences arise on consolidation of foreign entities. In such instances the translation difference is recognized in equity.

D Leases

Assets held under finance leases are capitalized as fixed assets and duly depreciated. The liability net of finance charges is shown on the Balance Sheet and the interest element is charged to the Income Statement over the term of the lease.

g) Funds Under Management

The assets and liabilities pertaining to pension and other funds which are managed in accordance with specific Investment Management Agreements are not included in the Balance Sheet of the Corporation. The market value of these portfolios at the end of financial year 2002 is $375.6 million.

h) Presentation

Comparative Figures. Certain changes in presentation have been made during the year and the comparative figures have been restated accordingly. These changes have no effect on the net profit of the previous year.

AlB

Trinidad 8. Tobago Unit I rust Cal pora tion

NOT EST 0 THE FIN A N C I A L S TAT E MEN T S (ContinNed)


3 TAXATION

4

5

The Corporation is exempt from Corporation Tax. A 5% withholding tax is applied to interest income at the point of distribution to unit holders in accordance with the Finance Act of 1997.

INVESTMENT FUNDS 2002 2001

$'000 $ '000

First Unit Scheme 1,623,939 1,253,856 Second Unit Scheme 4,359,239 2,898,592 Universal Retirement Fund 52,262 20,991 US$ Money Market Fund 1,754,583 818,717

Investment Funds 7,790,023 4,992,156

INVESTMENTS 2002 2001

$'000 $'000

Long Term Investments 350,017 316,120 Business Investments 473 1,683 Chaconia Income and Growth Fund 6,551 7,983

357,041 325,786

(a) The major portion of Long Term Investments represents the Corporation's holding in long term government bonds that will mature in fifteen (15) to twenty (20) years.

(b) The irrecoverable portion of Business Investments made by the Corporation has been taken to the Income Statement (See Note 18).

(c) The Chaconia Income and Growth Fund - sponsored by the Trinidad and Tobago UnitTrust Corporation -is incorporated in the State of Maryland, United States of America and registered as an open-ended, nondiversified, no-load management investment company under the Investment Act of 1940 of the United States of America. The diminution in value of the Corporation's investment in the Chaconia Income and Growth Fund has been recognized in the Capital Reserve Account (See Note 14).

Trillidad 8. TU~dCJo Urllt rrw,t Corpuratlon

NOT ES TO THE FINANCIAL STATEMENTS (ContinNed)


6 FIXED ASSETS

Free- Build- Lease- Office Motor Equip- Furnit TOTAL hold ing hold Improve- Vehicles . ment -ure

Land Land ments $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Year ended December 3 I 2002

Opening Net Book Value 12,305 69.589 2.170 12.616 1.869 4,495 6.075 109.119

Additions 1.915 845 6.137 429 9,326

Disposals (I 18) (I 18)

Transfers

Depreciation Charge ( 1,464) ( 1.544) (566) ( 1.829) (615) (6.0 18)

Closing Net BookValue 12,305 68,125 2,170 12,987 2,030 8,803 5,889 112,309

As at December 3 I 2002

Cost 12,305 72.844 2.170 15.524 3.577 16.384 8,418 131.222

Accumulated Depneciation (4.719) (2.537) (1.547) (7.581 ) (2.529) (18.913)

Net BookValue 12,305 68,125 2,170 12,987 2,030 8,803 5,889 112,309

As at December 3 I 200 I

Cost 12,305 72.844 2.170 16.11 3 3.108 10.247 7.990 124.777

Accumulated Depneciation (3.255) (3.497) ( 1.239) (5.752) ( 1.9 15) ( 15.658)

Net BookValue 12,305 69,589 2,170 12,616 1,869 4,495 6,075 109,119

The amount shown as Leasehold Land refiects the Corporation's interest in a ninety-nine (99) year lease

granted by the Government of the Republic of Trinidad and Tobago to the Unit Trust Corporation with

respect to land situated at the Corner of Richmond Street and Independence Square, Port of Spain for the construction of its Headquarters. In 1999 the Corporation completed construction of its Headquarters

Building through a Build, Own, Lease and Transfer arrangement.

A19

A20

Trinidad & Tobago Unit Trust Corpo ration

NOTES TO THE FINANCIAL STATEMENTS (Conlil/UNlj

For the year ended December 3] 2002

7 SHORT TERM CERTIFICATES OF INTEREST

This represents Guaranteed Investment Certificates backed by the underlying asset of Government bonds. The instruments are due within one year.

8 LONGTERM FINANCIAL INSTRUMENTS

This represents zero coupon financial instruments that are derived from a portion of the Government long term bonds. These instruments are payable in fifteen (15) to twenty (20) years.

9 FINANCE LEASE

The Corporation committed to a lease agreement with Republic Finance and Merchant Bank Limited (FINCOR) for the UTC Financial Centre on November 19, 1999. This agreement is for a term of 20 years, with purchase options at the end of the tenth and fifteenth years. The current portion of the debt at December 31 2002 was $3.122 million. The long term portion as at December 31 2002 was $72.047 million. Interest charges on the lease for 2002 amounted to $1 1.457 million.

10 INITIAL CAPITAL

Initial Capital is capital subscribed by the Initial Capital Contributors to the Unit Trust Corporation in accordance with Section 17 of the Act and invested in the First Unit Scheme.

I I UNIT CAPITAL

Unit Capital represents the capital value of units issued by the four Investment Funds operated by the Corporation. In respect of the First Unit Scheme, this excludes the acquisition cost of the units issued in respect of Initial Capital.

2002 2001 $'000 $'000

First Unit Scheme 1,619,128 1,249,045 Second Unit Scheme 4,359,239 2,898,592 Universal Retirement Fund 52,262 20,991 US$ Money Market Fund I ,754,583 818}I7 Total Unit Capital 7,785,212 4,987,345

Trinidad & Tobago Umt Trust CorpOldtlO1l

NOT EST 0 THE FIN A N C I A l S TAT E MEN T S (Collfillu.d)

12 FUND RESERVES

Guarantee Reserve US$ Money Market Fund Reserve Second Unit Scheme Reserve

Total Fund Reserves

0) Guarantee Reserve


2002 $'000

9,846 9,469 6,309

25,624

2001 $'000

6,001 8,589 5,648

20,238

In accordance with the provisions of Section 26( I) and (2) of the Act, the Board of Directors established a Guarantee Reserve Fund in respect of the First Unit Scheme to ensure adequate funding of the Guarantee Pricing Plan which was introduced in January 1985. The Guarantee Reserve Fund is funded by allocations from the Investment Income of the First Unit Scheme. In 2002 $2.2 million of the Guarantee Reserve Fund was utilized to finance the Guarantee Pricing Plan and $1.0 million was allocated to the Fund from the Income of the First Unit Scheme. In addition the Board allocated $5.0 million from Retained Earnings in 2002 to augment the Fund.

b) US$ Money Market Fund Reserve

In accordance with the provisions of Section 26( I) and (2) of the Act, the Board of Directors, established a Special Reserve Fund in respect of the US$ Money Market Fund (US$ MMF) to provide for maintenance of the capital value of the Fund. During 2002, US$ I 60,000 (TT$97 I ,200) was allocated to the Special Reserve Fund from the Investment Income of the US$ MMF. No calls were made on the US$ MMF Reserves in the year 2002.

c) Second Unit Scheme Reserve

In accordance with the provisions of Section 13 of the Second Unit Scheme Regulations issued under the Act, the Board established a reserve to satisfy any shortfall which may arise from the liquidation of securities in the portfolio of the Scheme. During 2002 $0.4 million was allocated to the Second Unit Scheme Reserve Fund from the Investment Income of the Second Unit Scheme. No calls were made on the Second Unit Scheme Reserve in the year 2002.

13 STATUTORY RESERVES

In accordance with Section 59(3)(d)(ii) of the Securities Industries By Laws 1997, a reserve of $5,000,000 was established to satisfy the capital requirements for registration as an Underwriter and $50,000 as an Investment Adviser.

A21

A22

Tri rllddd & To bago Unit Trust Corporation

NOT EST 0 THE FIN A N C I A L S TAT E MEN T S (C""tin~ed) For the year ended December 31 2002

14 CAPITAL RESERVE

Balance as at January I 2002 Unrealized Gain - Long Term Investments Unrealized Loss - Available for sale investments Foreign Exchange Translation Difference

on consolidation of subsidiary Transfer of Net Unrealized Losses on impaired asset to

Income Statement Reclassification of Foreign Exchange Losses

Balance as at December 3 I 2002

15 NET INVESTMENT INCOME - MANAGEMENT OPERATIONS

Net Investment Income - Management Operations comprises the following:

Interest and Other Fee Income Interest Expense and Other Charges

Total

16 DISTRIBUTIONS

2002 $'000

55,699 (29,202)

26,497

$'000

(1,263) 77,411 ( 1.749)

(28)

755 (94)

75,028

2001 $ '000

51,247 (43,731 )

7,516

The Corporation declared its thirty-ninth (39th) and forthieth (40th) distributions in respect of the First Unit Scheme during the year 2002 totaling $100.289 million. The distribution to registered unitholders as at June 30, 2002 amounted to $47.642 million and the December 31 2002 distribution amounted to $51.877 million. The total distribution to Initial Capital Contributors for the year amounted to $0.770 million.

Distributions in the Second Unit Scheme are made quarterly. Four (4) payments were made in 2002 and total distributions paid during the period January - November 2002 totalled $257.992 million. Income accrued as at December 3 I 2002 for distribution in the quarter ended February 2003 amounted to $18.523 million.

Distributions in the US$ Money Market Fund are paid by calendar quarters. Total distributions for the calendar year 2002 amounted to TI$96.29I million (US$15.863 million).

Trllllrlad & lOOilgO Uilit T'List CorpOlelllOl1

NOTES TO THE FINANCIAL STATEMENTS (Continued)


17 ADMINISTRATIVE EXPENSES

Included in 2002 Administrative Expenses are:

2002 $'000

68,166

2001

$ '000

53,998

(a) Directors' Fees and Auditors' Remuneration in the amounts of $0.847 million and $0.1 15 million respec

tively. The comparatives for 200 I were: Directors' fees $0.363 million and Auditors' fee $0.140 million; and

(b) Staff Bonus Incentive entitlements for two financial years. In 2002 the Corporation amended its policy with

respect to accounting for Bonus Incentive Payments. The change resulted in the Bonus Incentive entitle

ments for both 200 I and 2002 being recognized in the Administrative Expenses in 2002.

18 IMPAIRMENT CHARGES

19

In accordance with International Accounting Standard 39, International Financial Instruments: Recognition and

Measurement - the Corporation has taken to the Income Statement the value of Business Investments which

are considered irrecoverable.

MANAGEMENT CHARGE

2002 2001

$'000 $'000

First Unit Scheme 29,625 24,984

Second Unit Scheme 49,659 35,573

Universal Retirement Fund 934 391

US$ Money Market Fund 24,783 11.376

Total 105,00 I 72,324

The Corporation, in accordance with the regulations governing the First and Second Unit Schemes and the

prospectuses governing the Universal Retirement Fund and the US$ Money Market Fund, may charge a

management fee of up to two percent (2%) on the value of the funds held in each scheme .

A2 3


NOT EST 0 THE FIN A N C I A L S TAT E MEN T S (COffJinJl,d)


20 INVESTMENTS - FIRST UNIT SCHEME

Equity

Sanks RBTI Financial Holdings Limited Republic Bank Limited Scotiabank Trinidad and Tobago Limited FirstCaribbean International Bank Limited Manufacturing Trinidad Cement Limited Angostura Holdings Limited Lever Brothers West Indies Limited The West Indian Tobacco Company Limited National Flour Mills Limited Readymix (W I) Limited Conglomerates ANSA MeAl Limited Neal & Massy Holdings Limited Grace. Kennedy & Company Limited Barbados Shipping and Trading Limited Non Sanking Financial Institutions Guardian Holdings Limited National Enterprises Limited AI\JSA Finance and l'-1erchant Bank Limited American Life and General Insurance Company

(Trinidad and Tobago) Limited Property Point Lisas Industrial Port Development Corporation Limited TotalTT$ Equity Total US$ Equity Total S'dos $ Equity Total Equity Total Debt Securities

Cash and Short Term Investments TOTAL VALUE OF PORTFOLIO

The Portfolio of the First Unit Scheme is represented by:

Held to Maturity Financial Assets Available for Sale Financial Assets TOTAL

Shareholding (Stock Units)

12.429.426 4.943,165 6,636.862 2,145,834

9,790,572 6,987,207 1,226.770 1,243,876 6.884,794

35,780

4,974,855 4,299,225 2,088,000

70.000

2,304,949 8,796,000 1,729.626

462,416

2,191,880

Market Value $

226.215.553 197,347,588 139,705,945

18,239,589

56,295,789 42,272,602 33,184,129 21,021.504 20,083,622

212,891

79,846,423 77,60 1,011 10,544,400

773,500

49,210,661 43,980,000 13,664,046

2, I 03,993

22, 137,988 1,054,441,234

40,524,825 28,519,849

1,123,485,908 438,966,609

1,562,452,517 61,486,972

1,623,939,489

$ 17,642,438

1,606,297,051 1,623,939,489

Tllllldad & Tubago Uilit Trust COfporatloll

NOTES TO THE FINANCIAL STATEMENTS (Conhnlled)


21 UNREALISED CAPITAL APPRECIATION/DEPRECIATION

This represents the net unrealized gain on the valuation of the Investment Portfolio at the year's end.

22 INVESTMENTS - SECOND UNIT SCHEME

Securities

Government Securities

Government Guaranteed Securities

Corporate Securities

Cash and Short Term Investments

Total

The Portfolio of the Second Un it Scheme is represented by:

Held to Maturity Financial Assets

Available for Sale Financial Assets TOTAL

MarketValue $

702,808,298

796,347,48 1

41 1,073,369

2,449,0 I 0,262

4,359,239,410

$

2,3 61.309 ,940

1,997,929,470 4,359,239,410

A25

A26

Trimdad & Tobago Unit Tru,t Corporation

NOT EST 0 THE FIN A N C I A l S TAT E MEN T S (CMlinued)


23 INVESTMENTS - UNIVERSAL RETIREMENT FUND

Equity

Banks

RBTI Financial Holdings Limited Republic Bank Limited Scotiabank ofTrinidad & Tobago Limited

Manufacturing

Trinidad Cement Limited West Indian Tobacco Company Limited Lever Brothers West Indies Limited National Flour Mills Limited Readymix 0N I) Limited

Conglomerates

Neal & Massy Holdings Limited Grace, Kennedy & Company Limited ANSA McAI Limited

Non-Banking Financial Institutions

Guardian Holdings Limited ANSA Finance and Merchant Bank Limited National Enterprises Limited Chaconia Income and Growth Fund

Property

Point Lisas Industrial Port Development Corporation Limited

Trading

LJ Williams 'B'

Prestige Holdings Limited

MarketValue of Equity

Debt Securities

Cash and ShortTerm Investments NetAssetValue of Portfolio

The Portfolio of the Universal Retirement Fund is represented by:

Held to Maturity Financial Assets Available for Sale Financial Assets TOTAL

Shareholding (Stock Units)

203,778 22,357

2,000

300,960 87,226 30,975 95,306

1,000

191,292 370,020 93,614

157,072 340,768 441,000

9,631

282,009

100,000

25,000

Market Value $

3,698,571 938,994

42,000

1,715,472 1,469,758

836,325 285,918

5,900

3,443,256 1,850,100 1,497,824

3,345,634 2,675,029 2,182,950

468,308

2,834,190

261,000

107,500

27,658,729

19,645,702

4,957,128 52,261,559

$ 4,073,195

48,188,364 52,261,559

Tri llid"d 1\ TIlbago Uilit Trllst COlpolntion

NOT EST 0 THE FIN A N C , A l S TAT E MEN T S (Contil/Ned)

24 US$ MONEY MARKET FUND

Securities

Government Securities Corporate Securities Cash and Short Term Investments

Total


The Portfolio of the US$ Money Market Fund is represented by:

Held to Maturity Financial Assets Available for Sale Financial Assets

TOTAL

25 INVESTMENT IN SUBSIDIARIES

Local

Market Value $

525,345,327 24,280,000

1,204,957,432

1,754,582,759

$

785,007,481 969,575,278

1,754,582,759

During 1999 the Corporation established two (2) wholly owned subsidiaries - UTC Financial Services Limited and UTCTrust Services Limited - which were incorporated on March 23 1999 and June 2 1999 respectively under the Companies Act 1995 ofTrinidad and Tobago. During 2002 the Corporation established another wholly owned subsidiary UTC Property Development Limited. These companies are capitalized as follows:

2002 2001 $'000 $'000

UTC Financial Services Limited 20,000 20,000

UTCTrust Services Limited 15,000 15,000

UTC Property Development Limited 1,000

Total 36,000 35,000

The activities of the three (3) subsidiaries are immaterial in the consideration of these Financial Statements. There were no transactions in UTCTrust Services Limited and UTC Property Development Limited in this financial year and the transactions for UTC Financial Services Limited - which were minimal - have been incorporated in these Consolidated Accounts.

Foreign

The Corporation established a wholly owned subsidiary - Chaconia Fund Services, Inc. a Delaware corporation formed in 1997. In 1999 Chaconia Fund Services, Inc. acquired Chaconia Financial Services Inc. a Rhode Island corporation and registered broker-dealer. There were no transactions in Chaconia Fund Services, Inc .. The transactions in Chaconia Financial Services, Inc. though minimal have been incorporated into these Financial Statements.

A27

Tfl n,ciaci & Tobago Un it Trust Corporation

NOT EST 0 THE FIN A N C I A L S TAT E MEN T S (Continued)


25 INVESTMENT IN SUBSIDIARIES (Conlinlled)

Foreign (COlilinlled)

During 2002 the Corporation invested US$500,000 in the Belize Unit Trust Corporation. The Belize Unit Trust Corporation is a company incorporated under the Companies Act, Chapter 206, of the Laws of Belize and has its registered office at 77 Central American Boulevard, Belize City. At December 31 2002 the Corporation's share holding represented 71 % of the issued shares of the Belize Unit Trust Corporation. The Balance Sheet of the Belize UnitTrust Corporation as at December 31 2002 has been incorporated into these Financial Statements. Transactions in the Belize Unit Trust Corporation were minimal as it commenced operations in January 2003.

26 RETIREMENT BENEFIT PLAN ASSETS

Prior to January I 200 I the UnitTrust Corporation Pension Fund Plan (the Plan) had been a defined benefit plan. The Plan received formal approval during 2002 for conversion to a defined contribution plan with effect from January I 200 I. During 2002 the Corporation contributed $2.230 million to the Plan which has been charged against Income for the year 2002.

27 COMMITMENTS

The Corporation has agreed to participate in the Government Project Financing Facility to the extent of $1936 million. As at December 31 2002 disbursements amounting to $15.06 million had been made.

28 POST BALANCE SHEET EVENTS

These financial statements were authorized for issue on March 26',2003. There were no material post balance sheet events prior to authorization of the statements for issue which have a bearing on the understanding of the financial statements.

29 FINANCIAL REPORTING

The Corporation utilized a personal computer based spreadsheet to complement its main general ledger system which has demonstrated a numeric field limitation. Notwithstanding efforts by the general ledger software supplier; the numeric field limitation was only partially overcome by December 31 2002. The Corporation has embarked on a comprehensive integrated financial reporting upgrade project. one of the outcomes of which will be the replacement of its main general ledger system by December 3 I 2003 so as to meet its present and future expanded business needs. The combination of the main general ledger system and the personal computer based spreadsheet has not compromised the integrity of these financial statements.

Tri rllClarl & Tobago Urllt Trust Corporalrorl

§ ontcibutors to the Initial caPit~

The following institutions contributed to the Initial Capital of the Unit Trust Corporation:-

Central Bank of Trinidad & Tobago The National Insurance Board

COMMERCIAL BANKS

Citibank (Trinidad & Tobago) Limited First Citizens Bank Limited RBTT Bank Republic Bank Limited Scotiabank Trinidad & Tobago Limited

NON-BANK FINANCIAL INSTITUTIONS

ANSA Finance & Merchant Bank Limited Caribbean Finance Company Limited Clico Investment Bank First Citizens Trust & Merchant Bank Limited RBTT Trust Company RBTT Merchant Bank & Finance Company Republic Finance & Merchant Bank Limited

(FINCOR) Scotiatrust & Merchant Bank Trinidad &

Tobago Limited

LIFE INSURANCE COMPANIES

American Life and General Insurance Co. (Trinidad) Ltd

Bane Assurance Caribbean Limited {formerly Crown Life (Caribbean) Limited· wholly·owned subsidiary of Guardian Insurance Limited}

British-American Insurance Company (Trinidad) Limited Caribbean Atlantic Life Insurance Company T & T Limited

(operations managed by Guardian Life of the Caribbean Limited)

Colonial Life Insurance Company (Trinidad) Limited

Cuna Caribbean Insurance Society Demerara Life Assurance Company Goodwill General Insurance Company Ltd.

(wholly·owned subsidiary of West Indian Financial & Development Company Limited)

MEGA Insurance Company of Trinidad & Tobago Limited

Guardian Life of the Caribbean Ltd. Life of Barbados Limited

(wholly-owned subsidiary ofSagicor) Maritime Life (Caribbean) Limited Nationwide Insurance Co. Ltd.

(wholly·owned subsidiary ofSagicor) Sagicor (formerly Barbados Mutual Life

Assurance Society - The Mutual) Tatil Life Insurance Company Ltd. Winsure Life Insurance Company

(transferred and assigned to Maritime Life (Caribbean) Limited)

33

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